• Nov 11th 2010 at 12:00AM
  • 66
Having a teen driver can be very expensive when it come... Having a teen driver can be very expensive when it comes to insurance.

If you have a teenager that's close to driving age and you're planning to put the kid on your auto insurance policy, you'd better start saving your spare change. Or maybe even take a second job.

Adding a teen driver to your policy will typically increase your insurance premium by 44 percent, according to a study recently released by Insurance.com. And that's if you're only a one-car family. If you have two vehicles, adding a teen can raise your premiums by a potentially budget-busting 58 percent, and a three-car-family is looking at a whopping 62-percent spike.

The study was based on Insurance.com's analysis of car insurance quotes provided to users from October 2009 to September 2010.

Risky Business

This, of course, is because teen drivers are among the riskiest group to insure. According to the Centers for Disease Control and Prevention, drivers aged 15 to 19 are four times likely to get into a crash than older drivers – making car crashes the number one cause of death for teens.

"The first time I saw those statistics, I was as surprised as anyone else in the general public," says Kat Zeman, spokesperson for Insurance.com. "But, people in the insurance industry are accustomed to seeing those statistics."

Even teens with spotless driving records are looking at high rates for several years, just due to their lack of driving experience, says Zeman. At age 25, rates typically begin to decline, and middle-aged drivers have the lowest rates. They don't start creeping up again until age 65

"Insurance companies base their premiums on risk, and since teens are such a high risk to insure, as a group, your premiums are just going to jump up as a result," says Zeman. "And since teens don't have much driving experience, and are more easily distracted, they're going to have higher accident rates."

What Can You Do?

There are steps you can take in order to lower your premiums, both before and after the inevitable day when you add your teenager to your insurance policy.

1. Keep Your Driving Record Clean

The best way to keep your premiums down is to make sure your teen maintains a good driving record, meaning no tickets and no crashes. One of the best ways to do that is to make them take a driver's training class. This is an addition to whatever driver's ed course they may have taken in order to get their driver's license.

"If a teen takes one of those classes, and you can document that to the insurance company, that's telling the insurer that the teen is doing everything they can to try to be safe, and learn responsibility," says Zeman. "Sitting them down and giving them a pep talk about what a big responsibility driving is, and the importance of safe driving, can also help them in this respect."

Average Auto Rates By Age

Age group Average rate
16-19 $2,999
20-24 $2,040
25-29 $1,707
30-34 $1,591
35-39 $1,610
40-44 $1,603
45-49 $1,478
50-54 $1,284
55-59 $1,214
60-64 $1,169
65-69 $1,244
70-74 $1,187
75-up $1,203

Source: Insurance.com

2. Safety First

Always wear your seatbelt, and make sure your teenager does too. Maintain your vehicle even more diligently than you might otherwise when a teen is using it, as you don't want a mechanical problem or worn tires to contribute to an accident. Also make sure your vehicle has safety features like anti-lock brakes and an anti-theft device. These features can also reduce your insurance quotes, offers Zeman. Some insurance companies give discounts for seatbelt use, as well.

3. Hit The Books

Students with good grade point averages in school can sometimes receive a discount. Call your insurer to see if they offer one.

"The thinking there is that if the teen is responsible in school and studies hard and gets good grades, then he or she will probably be more responsible on the road," Zeman notes.

4. Call In "Big Brother"

This one may sound a bit draconian, but some insurance companies will offer a discount if you install a monitoring device in the vehicle that includes a GPS tracking device. Then you can see exactly where your teen is by logging on to a web site. These devices also have built-in sensors that detect things like sudden braking, sudden acceleration, etc.

Another type of monitor is a camera installed inside the vehicle that records what is going on both inside and outside the car. The camera only activates itself when sensors detect risky behavior, like hard braking or the aforementioned sudden acceleration, or abrupt swerving – and in the event of a collision.

"If you agree to install a device like one of these, you can save 10 to 15 percent on your premium," advises Zeman.

5. Don't Buy Your Kid A Car

Insurance.com's study also yielded this bit of shocking data: Buying a car for your teen and setting him up with his own insurance policy will result in an even bigger hit to the bank account, with the average annual insurance rate for such running $2,267. (This average includes all liability coverage levels.) That's compared to an average cost increase of $621 for adding your teen to your own policy.



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    • 1 Second Ago
  • 66 Comments
      lcthe2nd
      • 8 Months Ago
      2 words: Umbrella Policy. Mommy & Daddy are responsible if the child is on your auto policy. Mommy & Daddy could be resposible (depending on what state you live in) if your child has his or her own policy but lives in your household, is dependent on you, you pay the childs policy premium. Lawyers go after the deepest pockets and $100,000 limit is not enough if somebody is hurt badly or is killed.
      vlady1000
      • 8 Months Ago
      My 2 kids where not that much. They each had their own car, (a Mustang and a Probe) and just carried PL/PD. Honor students, no accidents, etc. I think the highest I paid was about $500/yr for each of their cars. Some of my friends where paying up to $3,500 for one of their kids (no so good kid) for full coverage. They would be riding a bike or skateboard, full time, before I would pay that.
      tj123123
      • 8 Months Ago
      You could do as my Dad did. He told us, if you want a car and want to drive, buy your own car and get your own insuance. His insurance never went up!
      gr8bsn
      • 8 Months Ago
      "Call in big brother." - See, they get us used to it in the name of "safety" first, then when it becomes mandatory for everyone.. "but I've got nothing to hide" the sheep say...
      • 8 Months Ago
      Try this site where you can compare quotes from different companies insureinfo.us
      • 8 Months Ago
      Or you can do what my parents did and make the kid for the whole thing. Not only does it teach responsibly, but it also teaches us to work for everything.
      helyj
      • 8 Months Ago
      If you son or daughter studies abroad, call you insurance company and don't cancel. You will end up with a break in insurance and it will cost more money when they reinstate as they will be coded as a new driver (again). You may be able to reduce limits during this period. This is one of those non-intuitive rules that allow them to charge more.
      richardhelmes
      • 8 Months Ago
      Put your kid on the oldest, cheapest, paid-for car you have, and drop the collision insurance (that covers your car if it's your fault) because it's expensive and doesn't make sense on a car that is not worth much. I am surprise this wasn't covered in the article, but then most of the time these so-called "experts" are usually off base.
      • 8 Months Ago
      I agree that the insurance companies have to protect themselves, ******** not all teenagers that get into accidents. My insurance is outrages and I have a new car with my teenage daughter on it and she cost me a fortune without any tickets or accidents, the bottom line of it all is the economy, everything is going up.
      Joe Smuccatelli
      • 8 Months Ago
      Well I have had two kids that have gone through this process and whoever it was that stated it was best to switch companies doesn't have clue. It maybe OK until you find the right one but once you do stick with them. I have been with State Farm for over 25 years and there is not another company out there that can quote a better rate for the coverage that I carry. All have tried and failed and when they ask what my rates are and I tell them they ask for proof. I gladly give them the proof and then they ask how long I have been with them and when I tell them they say OH you are getting a longevity rate. Also, since I brought my kids through the same system they are getting the same breaks with the same agent the I recieve. So to make it simple stick with a good company. It also helps if you have multiple policies with the same compnay that is why I have Auto, Home and Life with State Farm. BTW I also have my IRA with them as well. As far as getting anything in return I have had numerous claims over the years and they are always ready to take care of me. In fact my wife was broadsided by another person covered by Progressive and her company jerked me around for 2 weeks and wanted to limit me to what kind of rental vehicle I could have nad for how long. The accident bent the frame on my truck and they started talking about repairing it and State Farm stepped in and took over the claim stating they were not going to put their insured in a vehicle that had extensive frame damage. They paid my new truck off, gave me a check and I was back in a new truck within 2 days. And imagine all this and they didn't even raise my rates even though they paid off not only the damage but medicla as well. I am sure Progressive was not happy paying off to State Farm, but oh well. If they had not tried to jerk me around they would have got off easier. Oh did I forget to mention I get a rebate about every 6 months for my loyalty.
      • 8 Months Ago
      One important item was missed here... the type of car has a lot to do with insurance rates. If your teen is listed on an SUV or two-door sport the rates will be higher than a 4-door sedan. My teen son is on my insurance on my second car as the primary driver. Our 2000 Malibu is less than have the price to insure him on than was our 2000 Ford Explorer. Also, some companies offer discounts or premium suspension if your child attends college more than 100 miles from home. An other saver for us.
      • 8 Months Ago
      I am a licensed insurance agent in Texas and I can tell you that this article is crap!! I know of no insurance company that gives a "discount for seatbelt use"?? The monitoring device he speaks of is offered by Progressive and you have to pay for it as well as a monthly fee. The last time I looked into offering it to a client, it actually would have cost them more than they were going to save.
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